Phone man lines up BT challenge

A 39-YEAR-OLD entrepreneur is ready to mount the first serious challenge to BT's and Mercury's transatlantic telephone monopoly with a staff of four operating out of the World Trade Centre in London.

The Department of Trade and Industry is expected to issue a licence for the new venture in the next few weeks. The new company, Swiftcall, aims to charge between 25p and 28p a minute plus VAT for calls to North America - about half the BT standard rate.

Swiftcall's system will use lines leased from Mercury. Sprint, a large US telephone company, delivers the calls at the other end. Tom McCabe, the company's founder, said: 'I am ready for business.'

His system can handle 98 calls or fax transmissions simultaneously, but he claims it can expand if demand requires. However, Mr McCabe does not expect to be inundated initially.

'The hard thing is selling up front,' he said. 'There is a credibility problem and we are not going to be under siege.'

Residential customers pay pounds 50 and make calls at 28p a minute plus VAT until their credit runs out and another pounds 50 falls due. Business customers pay pounds 1,000 and make calls at 25p a minute plus VAT.

Customers are given a free three-minute call to reassure themselves that the system works. Beyond that, Mr McCabe says his only assurance to them is his three-year contract with Mercury for the lines and a five-year lease on his office at the World Trade Centre.

Mr McCabe believes that even at 30 per cent capacity, he can reach a turnover of pounds 10m a year and make a substantial profit. He plans an investment of pounds 2m over the first three years. The service will extend to Japan and Australia, with for India, Israel and Ireland. 'This is a no-frills telephone company. It's only a phone call - this is no big deal,' he said. 'I am not asking people to disconnect from BT or Mercury. This is only for certain destinations where we can be cheaper.'

At 39, he has already had businesses ranging from importing telephone equipment to running a telephone dating agency. His other main business is the Comedy Cafe, a restaurant and theatre in east London.

The DTI declined to comment on Swiftcall, but it is understood to be close to making an announcement about it.

(Photograph omitted)